I think there are a good number of small cap shares trading on the Australian share market which have the potential to grow into mid caps or even large caps in the future.
Three small cap shares that I’m watching very closely are listed below. Here’s why I think you should add them to your watchlist:
Audinate (ASX: AD8)
Audinate is a leading provider of digital Audio-Visual networking technologies and the company behind the award-winning Dante audio over IP networking solution. Dante is an uncompressed, multi-channel digital media networking technology, with near-zero latency and synchronisation. It has quickly become the industry’s preferred audio networking solution and has been adopted by more pro-audio AV manufacturers than any other networking technology. This has led to the company delivering strong revenue growth over the last couple of years. I expect more of the same in the years to come, especially with the company rolling out new product initiatives.
LiveTiles Ltd (ASX: LVT)
LiveTiles is a digital workplace platform provider and award-winning Microsoft Partner. Its software gives developers and business users tools to easily create dashboards, employee portals, and corporate intranets that can be further enhanced by artificial intelligence and analytics features. Demand for LiveTiles’ offering has been growing strongly in recent year, leading to annualised recurring revenue (ARR) more than tripling during the first three quarters of FY 2019 to $34.5 million. This puts the company on track to achieve its target of ARR of $100 million by the end of June 2021.
Serko Ltd (ASX: SKO)
Serko is the leading online travel booking and expense management provider in the ANZ region. At the last count, more than 6,000 corporate customers across Asia Pacific, North America, the UK, and Europe were using Serko’s products to help manage their corporate travel programs and make sense of their corporate expenses. One major client the company has is travel agent giant Flight Centre Travel Group Ltd (ASX: FLT), which I believe is a testament to the quality of its offering. Demand has been growing strongly, leading to management providing full year revenue growth guidance in the range of 20% to 30%.
Where to invest $1,000 right now
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*Returns as of February 15th 2021
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended AUDINATEGL FPO. The Motley Fool Australia has recommended Serko Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.